Manitoba Hydro-Minnesota Power deal could spur new hydro

Canada’s Manitoba Hydro and U.S. utility Minnesota Power have signed a preliminary electricity supply agreement that could spur construction of new multi-billion-dollar hydroelectric projects in Canada and a cross-border transmission line.

The utilities announced a two-stage plan Jan. 29 in which Manitoba Hydro is to export carbon-free surplus electricity to Minnesota starting in 2008. The second stage would be a 15-year purchase of 250 MW by Minnesota Power, starting about 2020.

Tied to the long-term agreement, Manitoba Hydro would build either US$3.5 billion, 620-MW Keeyask (Gull) or US$5 billion, 1,250-MW Conawapa in northern Manitoba, a Manitoba Hydro spokesman said. (HNN 12/6/07) Both sites are on the Nelson River, near Gillam.

Conawapa previously was floated as a supply source for an export deal with neighboring Ontario.

“We haven’t made as much progress in that area and this sale is on track now and we’ll be moving on one of those northern projects,” spokesman Glenn Schneider said.

There is no current cost estimate for the transmission line because the utilities still are determining routes on either side of the Canada-United States border, he said.

The firms have one year to complete talks and sign definitive agreements. Those agreements would be subject to approval by the Minnesota Public Utilities Commission.

Manitoba Finance Minister Greg Selinger said the deal bolsters Manitoba Hydro’s exports markets, allowing the utility to keep rates low at home. Minnesota Power said the electricity deal fits with an energy strategy presented in its Integrated Resource Plan filed with the state in 2007.

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